Zepto just filed its DRHP. It wants to open 1,900 new dark stores, on top of the 1,139 it already runs. Blinkit, the only profitable player in the sector, is racing to 3,000 stores by March 2027. Meanwhile, its adjusted EBITDA is just Rs. 37 crores — not a lot considering the billions that have been spent on getting it to profitability.<br>The dark store is quick commerce&#x27;s core bet — and its biggest fixed cost. Rents are rising, FMCG prices are up, and user growth at Zepto actually declined between December and March despite spending over Rs 1,300 crore on advertising.<br>The model is scaling. But will the economics ever catch up?<br>Tune in.<br>Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Zepto's DRHP underlines the inevitable cost at the heart of quick commerce

Daybreak

A couple hundred meters away from the Indiranagar metro station, between a juice shop and a car and bike service center, is a Blinkit dark store. It's not very big and it's not for any of us to browse through. Right outside it, delivery drivers wait on their bikes. Some chat, some scroll, some grab a quick bite before the next delivery. And every few minutes, some go inside and leave with brown paper packages.

In about 10 minutes, someone in a PG or an apartment building will receive their orders of late night ramen or cold meds. Different flavors of cures for the rainy chilly nights right now. Now, we've all heard about and know in theory what dark stores are. There are thousands of them sprinkled across the country, but most of them are concentrated in dense urban residential areas. Most of the time, consumers like you and I don't really give them a second thought.

Out of sight, out of mind. But as Zepto's DRHP filed early this month showed, it's one of the most core infrastructure for a quick commerce company to scale. Now, Zepto's proposed public issue includes a fresh issue of shares worth 8,010 crore rupees and an offer for sale of nearly 11.35 crore shares by existing shareholders.

And as Outlook Business reports, a substantial portion of the fresh issue proceeds is directly going to fuel the expansion of Zepto's dark store network. The company has earmarked more than 1,600 crore rupees to open 1,900 new dark stores across existing and new markets. That's on top of its existing 1,139 stores, by the way. Now, that's a staggering total number of 3,039 stores.

Zepto's DRHP underlines the inevitable cost at the heart of quick commerce

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Zepto's DRHP underlines the inevitable cost at the heart of quick commerce

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.